The forthcoming blockchain’s transition to proof-of-stake consensus, according to Ethereum co-founder Vitalik Buterin, will have no negative impact on miners minting new tokens on the blockchain’s predecessor, Ethereum Classic.
Buterin stated at a webinar on Saturday that he does not expect any negative impacts on the blockchain because the majority of the Ethereum community supports the merger. The transition to proof-of-work eliminates the need for Ethereum miners, who presently safeguard the network with expensive mining equipment while earning ETH, and for whom the transition could result in severe financial loss.
As a result, many miners may return to the original Ethereum blockchain, Ethereum Classic, which continues to use proof-of-work. The origins of Ethereum Classic can be traced back to a philosophical schism in the Ethereum community in the aftermath of the 2016 hack of The DAO, a decentralized autonomous organization whose rules of operation were encoded in code included in a smart contract.
The DAO was hacked for $3.6 million, dividing the Ethereum community. One group voted to transfer funds from The DAO’s smart contract to another. Others, on the other hand, chose to keep the existing smart contract. The first group chose to shift the cash from the smart contract to a new chain, or “fork,” while others chose to keep the old blockchain, known as Ethereum Classic, which still uses a proof-of-work consensus method.
According to Beiko, users should not detect any differences.
There are fears that miners returning to Ethereum Classic would disrupt the merger. Following the 2016 fork, Ethereum experienced a wave of denial-of-service attacks, and crypto exchanges are anticipated to proceed with caution when the merge occurs. According to developer Tim Beiko, users should not notice any differences.
Buterin went on to say that Ethereum Classic has a strong community and a solid product for proof-of-work enthusiasts. The community firmly supports the value of proof-of-work. Nonetheless, the market could split.
Buterin hopes that no one loses money.
Miners are already facing financial difficulties as a result of declining Ethereum mining profits induced by the prolonged drop in Ethereum pricing. Institutional bitcoin miners have been forced to sell bitcoins in order to improve liquidity on their balance sheets. Others are borrowing against bitcoin mining devices, which are known as Application-Specific Integrated Circuits.
Buterin stated that he hopes that people do not lose money in any case.
In May 2022, he stated that, barring any complications, the merger may take place in August. Problems could cause the integration to be postponed until September or October 2022.